June 2005

Bulletin Editor:- Jonathan Montgomery, BA, LLMProfessor of Law, University of Southampton
Butterworths Family and Child Law Bulletin provides an immediate
updating service for the main text of Butterworths Family Law
Service and Clarke Hall and Morrison on Children. The Bulletin is
published every month and sent to subscribers to those
publications.

References to BFLS and CHM above each case are to the relevant
paragraphs in Butterworths Family Law Service and Clarke Hall and
Morrison on Children.

Private law

Case should be heard despite mother’s illness

Blunkett v Quinn [2005] 1 FCR 103

Blunkett v Quinn [2005] 1 FCR 103 concerned an appeal by the mother
of the child against the refusal of the district judge to adjourn
proceedings. Her application for the adjournment was based on the
fact that she was unwell and pregnant. Ryder J found that it would
not breach her rights to a fair trial to proceed with the case. She
seemed to be able to give instructions. Delay would have damaged
the relationship between David Blunkett and the child. There was no
guarantee that the health issues would soon be resolved (they may
have been induced by the stress of the litigation and could recur
when it was resumed). It would be an abrogation of the
court’s responsibility for the rights of the child to fail to
advance the resolution of the issues for four months. There should
be active case management to resolve the paternity issues in the
case.

Comment: This much-discussed case did not, as
journalists seem to have suggested, concern an application for DNA
testing or for residence by the former Home Secretary, David
Blunkett. Ryder J gave the judgment in public so that false
impressions could be corrected. He found that this was the most
proportionate option available, and reduced the interference into
the private lives of the parties by hearing the appeal in private
and excluding unnecessary personal material from the judgment. He
was careful to stress that the case had not in any way been fast
tracked because the protagonists were in the public eye.

In Re S (children: application for removal from jurisdiction)
[2004] EWCA Civ 1724, [2005] 1 FCR 471 a mother sought permission
to relocate with the children from Halifax, where she had no ties,
to Spain, where her mother and brother were already well
established. She planned to invest in property there and had
arranged private education for the two girls, funded partly by
herself and partly by her mother. She offered the father contact
over long weekends and the school holidays. The father currently
worked as a consultant for a German bank, commuting weekly to
Germany at the firm’s expense and also travelling extensively
abroad. He attacked the mother’s plans as unrealistic and
impugned her motive, saying that contact would suffer. He did not
appear to the recorder as having researched the possibilities of
contact. The recorder refused the mother permission to relocate. He
noted that the move to Spain was a matter of choice not necessity,
contrasting this with earlier cases. The Court of Appeal held that
this was a misdirection. The mother had a perfectly natural desire
after the breakdown of a short marriage to rejoin her own family.
The unusual factor of the case was that her own family had
themselves relocated to Spain. Even if it had been merely a matter
of lifestyle choice, the principles set out in Payne v Payne [2001]
EWCA Civ 166 would still apply. There were some aspects of the case
requiring further comment. The wife’s case did not set out
the impact upon her of a refusal to permit her to go abroad, which
would normally be expected. It could be inferred that the isolation
she experienced in Halifax would be damaging to her and her
relationship with the children. The father’s commitment to
contact was less than in some cases. He had already established a
pattern of contact on alternate weekends and had only sought
holiday contact once the case was started. He seemed not to have
contemplated altering the pattern of his work life so as to
facilitate contact despite emphasising its importance to his case.
The recorder had misdirected himself as to the proper legal test.
The Court of Appeal granted the mother permission to relocate, her
departure to be deferred until arrangements for contact had been
defined either by agreement or by further order of the court.

Comment: The Court of Appeal reiterated the
principle, set out in Payne v Payne, that the courts should not
obstruct reasonable plans for parents with resident to move their
lives forward. There was an understandable rationale behind the
mother’s relocation plans and they had been thought through
and planned. The father’s objections were not based on a
similar degree of planning and the Court of Appeal clearly felt
some concern that he was raising the difficulties of contact as
much to disrupt the mother’s plans as to further the
interests of the children. It drew attention to the relative lack
of interest that he had previously shown. The recorder’s
suggestion that the mother’s decision to move abroad was
essentially a lifestyle choice – a preference rather than a
practical necessity – was seen as overplayed. The legal
questions to be asked remained the same. However, it is possibly
still the case that were the move to have been no more than
convenience, that the courts would have been more reluctant to
sanction it. The Court of Appeal noted that the relocation to Spain
was not arbitrary and that staying in Halifax would have had an
adverse effect on the mother. That these were relevant factors
suggests that the courts would be reluctant to permit contact
between children and their non-residential parents to be disrupted
on mere whim.

Public authorities’ liability

Liability for failing to diagnose special needs
accurately

Carty v Croydon LBC [2005] EWCA Civ 19, [2005] 1 FCR
554

In Carty v Croydon LBC [2005] EWCA Civ 19, [2005] 1 FCR 554 the
Court of Appeal considered the law on liability in tort of
education authorities for failure to secure the welfare of children
with special educational needs. The claimant contended that the
authority had failed to reassess and amend his statement of needs
when a school placement broke down in 1988 and in leaving him at
the school to which he was sent on the basis of the unamended
statement when it became apparent that it was not going well
(1991–1993). It was noted that there was no action for
compensation for breach of statutory duty under the Education Act
1981 (now the Education Act 1993) because that had not been the
intention of Parliament (see Phelps v London Borough of Hillingdon,
Anderton v Clwyd CC, Jarvis v Hampshire CC [2000] 3 FCR 102). It
was possible for an independent action to lie at common law for
negligence. The court had to consider first whether the issue was
justiciable. This matter was not determined simply by asking
whether the decisions in question involved the exercise of
discretion. Decisions would not normally be justiciable where
competing public interests had to be weighed against each other by
a public body to whom the responsibility for that balance had been
entrusted by Parliament (Barrett v Enfield London Borough Council
[1999] 2 FCR 434) but such cases would be relatively rare and this
case was not in that category. Nor would mere failure to perform a
statutory duty give rise to a common law negligence claim (Gorringe
v Calderdale Metropolitan Borough Council [2004] UKHL 15). If
decisions were justiciable then the court would need to consider
whether damage was reasonably foreseeable, proximity between the
claimant and the authority, and whether it was just and reasonable
to impose a duty of care. Most cases involving the management of
education or care responsibilities would turn on potential
vicarious liability (see Barrett and Phelps). Where a discretion
was exercised that was heavily influenced by policy then it would
be unlikely to be negligent unless it was a decision that no
reasonable authority could have made. Where, however, it involved
the exercise of professional skill in relation to an individual
child, then the court would judge negligence against the practices
accepted as proper by a responsible body of professional opinion
(the test set out in Bolam v Friern Hospital Management Committee
[1957] 2 All ER 118). If a member of the authority’s staff
was negligent, then the authority could be vicariously liable.
There was no blanket immunity for teachers on policy grounds. For
the purposes of the liability rules, education officers were
professionals for whom on the authority could be vicariously
liable. The court had, therefore, to consider the substance of the
decisions made.

Taxation

(Notes contributed by Philip Wylie, tax editor of
BFLS)

The following is a summary of the principal changes affecting
taxation of the family which were either announced or confirmed in
the Budget on 16 March 2005.

Income Tax

Rates for 2004/05 and 2005/06

2004/05

starting rate – 10% on the first £2,020 of taxable
income

basic rate – 22% on taxable income from £2,021 to
£31,400

higher rate – 40% on taxable income over £31,400

2005/06

starting rate – 10% on the first £2,090 of taxable
income

basic rate – 22% on taxable income from £2,091 to
£32,400

higher rate – 40% on taxable income over £32,400

The rate of tax on dividend income plus the related tax credit is
10% for a taxpayer who is not liable to higher rate income tax, and
32.5% for a taxpayer who is. The rate of tax on certain other
savings income, mainly interest, is 10% if the income is wholly
within the starting rate band, 20% (rather than 22%) if the income
is within the basic rate band, and 40% for a taxpayer who is liable
to higher rate income tax.

For 2005/06 the trust rate of tax, payable mainly by discretionary
and accumulation trusts, remains at 40%, and the Sch F (dividends)
trust rate remains at 32.5%.

Personal reliefs for 2005/06 (2004/05 reliefs in
brackets)

personal allowance

under 65 – £4,895 (£4,745)

65–74 – £7,090 (£6,830)

75+ – £7,220 (£6,950)

married couple’s allowance for those over 65 before 6 April
2000 (restricted to tax relief at 10%)

65–74 – £5,905 (£5,725)

75+ – £5,975 (£5,795)

minimum allowance £2,280 (£2,210)

The personal and married couple’s allowance for the over 65s
are reduced by one half of excess of total income over £19,500
(£18,900 in 2004/05), but they can never be reduced below the
ordinary personal allowance or the minimum married couple’s
allowance.

Blind person’s allowance has been increased from £1,560
to £1,610.

Maintenance payments

For those few maintenance payments which continue to qualify for
income tax relief (a pre-condition is that one spouse must have
been over 65 before 6 April 2000), the maximum amount on which a
10% tax credit can be claimed is £2,280 (£2,210 in
2004/05).

Working tax credit and child tax credit

The working tax credit and child tax credit rates and thresholds
for 2004/05 and 2005/06 are:

2004/05 2005/06

Working Tax Credit

Basic element – £1,570 £1,620

Couple and lone parent element – £1,545 £1,595

30 hour element – £640 £660

Disabled worker element – £2,100 £2,165

Severe disability element – £890 £920

50+ return to work payment – (16-29
hours) £1,075 £1,110

50+ return to work payment – (30+
hours) £1,610 £1,660

Childcare element of the Working Tax Credit

Maximum eligible cost for one child per week
– £135 £175

Maximum eligible cost for two or more

children per week £200 £300

% of eligible childcare costs covered £70 £70

Child Tax Credit

Family element – £545 £545

Family element, baby addition – £545 £545

Child element – £1,625 £1,690

Disabled child element – £2,215 £2,285

Severely disabled child element £890 £920

Tax credits income thresholds and withdrawal rates

First income threshold £5,060 £5,220

First withdrawal rate (per cent) 37% 37%

Second income threshold £50,000 £50,000

Second withdrawal rate (per cent) 6.67% 6.67%

First threshold for those only entitled to
CTC £13,480 £13,910

Income disregard £2,500 £2,500

Capital gains tax

For 2005/06 the annual exemption is increased from £8,200 to
£8,500. The CGT rates remain unaltered at 10%, 20%, and
40%.

Inheritance tax

The inheritance tax threshold is increased from £263,000 to
£275,000 for tax charges arising on or after 6 April 2005. The
threshold for the following two years has also been announced as
£285,000 for 2006/07 and £300,000 for 2007/08.

Stamp Duty and Stamp Duty Land Tax

The threshold for stamp duty land tax on residential property has
been raised to £120,000, applicable to transactions the
effective date of which is on or after 17 March 2005 (there is no
change to the £150,000 threshold for residential transactions
in designated disadvantaged areas). SDLT is therefore only payable
if the consideration exceeds £120,000, but there is no
marginal relief. There is no change to the rates of SDLT, or to the
3% threshold (£250,000) or 4% threshold (£500,000).

If, exceptionally, a sale of residential property remains subject
to stamp duty, the threshold is raised to £120,000. Subject to
that, the rates of stamp duty are unaltered.

Civil partnerships

From 5 December 2005 a same-sex couple will be able to register
their partnership and attract the same legal consequences as if
they were a married couple. That has consequences for their tax
liabilities. Accordingly the government has announced that
legislation will be implemented, taking effect from 5 December
2005, which will ensure that the tax treatment of a registered
civil partnership will mirror that of a married couple. In a Budget
summary press release the principal effects were stated as:

‘— Transfers between civil partners in lifetime or on
death will generally be exempt from inheritance tax without
limit.

— Only one property owned by a couple who are civil partners,
whether that property is owned solely or jointly, may be treated as
the principal private residence of either of them at any time for
the purposes of capital gains tax private residence relief.

— Transfers of assets between persons who are civil partners
who are living together will be on a no-gain no-loss of basis for
capital gains tax purposes.

— Pension tax legislation will be amended so that references
to husband, wife, ex-husband, ex-wife, spouse, ex-spouse, surviving
spouse, widow, widower will now include civil partner, former civil
partner and surviving civil partner under the terms of the
CPA.

— There will be an exemption from stamp duty and stamp duty
land tax for transactions carried out in connection with the
dissolution of a civil partnership so that transfers of shares or
the transfer of the partners’ home from joint ownership into
the sole ownership of one of the ex-partners is exempt.

— Where one of the partners was born before 6 April 1935 the
partners will be entitled to an allowance equivalent to the married
couple’s allowance.

— Anti-avoidance legislation will be extended to include
civil partners in the same way as spouses, including the
legislation relating to settlements, company control and the
transfer of assets abroad.’

Statute

Mental Capacity Act 2005 (c 9)

This Act makes provision for medical treatment of those unable to
consent for themselves, including the appointment of lasting powers
of attorney.

Statutory Instruments

The Family Proceedings Fees (Amendment) Order 2005, SI
2005/472

Under art 3(2)(b) of the Family Proceedings Fees Order 2004, SI
2004/3114, there is a maximum gross annual income taken into
account for the purposes of working tax credit, above which working
tax credit will not be a qualifying benefit for the purposes of
exemption from court fees under the Order. This Order amends that
maximum gross annual income, from £14,600 to £15,050 with
effect from 6 April 2005.

The Children (Allocation of Proceedings) (Amendment) Order
2005, SI 2005/520

This Order came into force on 1 April 2005. Exeter County Court has
become a Care Centre as defined in art 2 of the Children
(Allocation of Proceedings) Order 1991. A Care Centre is a county
court designated for the purpose of hearing cases under Parts III,
IV or V of the Children Act 1989. This Order effects this change
and amends the 1991 Order to re-organise the transfer arrangements
between magistrates’ courts and Care Centres on the Western
Circuit to reflect this change.

Amendments to the Order have also been made to replace references
to ‘petty sessions areas’ and ‘London commission
area’ with references to ‘local justice area’ to
reflect the changes to the organisation of the courts made by the
Courts Act 2003 which are also being brought into force on 1 April
2005. References to circuits are changed to references to the new
administrative regions which will be used after that date.

At the same time the opportunity has been taken to up-date the
names of the petty sessions areas (local justice areas as they will
become) in consequence of changes to their boundaries which have
not previously been reflected in the 1991 Order.

The Social Security Benefits Up-rating Order 2005, SI
2005/522

This Order is made as a consequence of a review under s 150 of the
Social Security Administration Act 1992 and sets out the uprated
sums of benefits mentioned in that section. The uprating took
effect on various dates in April 2005.

The Family Proceedings (Amendment No 3) Rules 2005, SI
2005/559

These Rules amend the Family Proceedings Rules 1991 in consequence
of the Gender Recognition Act 2004, to make changes consequent on
the introduction of Welsh family proceedings officers, and to make
several further, minor, changes. The changes took effect in April
2005.

The 2004 Act provides for transsexual persons legal recognition in
their acquired gender on the issue of a full gender recognition
certificate. A person may apply to a Gender Recognition Panel. If
the applicant meets the statutory criteria and is unmarried, the
Panel will issue to him a full gender recognition certificate. If
he is married, the Panel will issue to him an interim gender
recognition certificate. The 2004 Act amended the Matrimonial
Causes Act 1973 (c 18) (‘the 1973 Act’) to provide two
new grounds of nullity. The first is where an interim gender
recognition certificate has, after the time of the marriage, been
issued to either party to the marriage (s 12(g) of and Sch 1, para
11(1)(e) to the 1973 Act, as amended by s 4(4) of and Sch 2 to the
2004 Act). Where a person obtains a decree absolute of nullity on
this ground, the court must issue to him a full gender recognition
certificate. The second new ground of nullity is where the
respondent is a person whose gender at the time of the marriage had
become the acquired gender under the 2004 Act (s 12(h) of the 1973
Act, as amended by s 11 of and Sch 4, paras 4–6 to the 2004
Act). A person’s gender only becomes the acquired gender
under the 2004 Act when a full gender recognition certificate is
issued to him.

Rule 4 inserts FPR rr 2.6A and 2.6B, which require
a petitioner to file with his petition a copy of the interim gender
recognition certificate (if the petition is brought on the first
new ground of nullity) or a copy of the full gender recognition
certificate (if the petition is brought on the second new ground).
The petitioner may apply to court if he is unable to do this. FPR r
2.6A requires the proper officer of the court to notify the
Secretary of State of petitions brought under the first new ground.
Rule 6 inserts FPR rr 2.12A and 2.12B, which make corresponding
provision where either new ground of nullity is raised for the
first time in an answer to a petition. Rule 5 inserts FPR r 2.9A,
which requires respondents to petitions on the new grounds of
nullity to file with any acknowledgement of service a copy of the
appropriate certificate. Corresponding provision for replies to
answers raising either of the new grounds for the first time is
made by FPR r 2.13A inserted by rule 7.

Rule 9 inserts FPR rule 2.51AA which makes
provision for applications made under s 6(1) of the 2004 Act (where
a court has issued a full gender recognition certificate which
contains an error, an application may be made under this section
for the issue of a corrected certificate).

Rule 15 inserts FPR rule 3.24 which makes
provision for references made under s 8(5) of the 2004 Act (where
the Secretary of State considers an application for a gender
recognition certificate to have been secured by fraud). Where the
Secretary of State is aware that nullity proceedings have been
brought on the first new ground, he must give particulars of this
and serve notice of the s 8(5) reference on the court in which
those proceedings are pending. Rule 8 amends FPR r 2.49(2), so that
a decree on the first new ground of nullity should not be made
absolute if a search of that court’s records discloses extant
s 8(5) proceedings.

Rule 20 inserts FPR r 8.4 which makes provision
for appeals under s 8(1) of the 2004 Act (which provides a
statutory appeal to the High Court on a point of law against a
decision of a Gender Recognition Panel to reject an application
made to it).

Rules 23(a) and 24 make minor amendments, largely
to reflect the changes made by these rules to FPR Part 2.

Rules 3(b) and 16–19 amend the FPR 1991 to
enable functions performed by an officer of the Children and Family
Court Advisory and Support Service (‘CAFCASS’) under
the Family Proceedings Rules 1991 to be performed by a Welsh family
proceedings officer. The amendment follows the transfer of
functions from CAFCASS to the National Assembly for Wales by s 35
of the Children Act 2004 for children ordinarily resident in
Wales.

A Welsh family proceedings officer is defined under sub-s (4) of
that section as any member of the staff of the National Assembly
for Wales (‘the Assembly’) appointed to exercise the
functions of a Welsh family proceedings officer, and any other
individual exercising those functions by virtue of s 36(2) and (4)
of that Act (which allow the Assembly to make arrangements with
organisations and individuals to perform the functions of Welsh
family proceedings officers).
Rules 25 and 26 make transitional provision to deal with
the situation where a CAFCASS officer who is already acting as a
children and family reporter or a children’s guardian in
proceedings becomes a Welsh family proceedings officer.

Rules 10–14, 21, 23(b)–(d) and Schs 1 and
2 amend the FPR by making a number of minor changes to
Part 3 (other Matrimonial etc Proceedings). Rules 12 and 14 remove
redundant references to Form M11 (Notice of Application for
Ancillary Relief). This form was revoked by SI 1999/3491 with
effect from 5 June 2000 and replaced by Forms A and B.

Rule 13 amends a current inconsistency in r 3.9A
(Enforcement of orders made on applications under Part IV of the
Family Law Act 1996) so that certain provisions of the Rules of the
Supreme Court 1965 and County Court Rules 1981 may apply, with
necessary modifications, to the enforcement of orders made on the
court’s own motion under Part IV of the Family Law Act
1996.

Under the Matrimonial Causes Rules 1977, Form 6 was a combined form
of Acknowledgement of Service that could be used for both
matrimonial proceedings and other forms of originating process. The
revised Form M6 introduced by the FPR was specifically designed for
use in divorce proceedings, however, references to the use of the
old version of the form were carried over into Part 3 of the FPR.
Rule 23(d) resolves this inconsistency by inserting into Appendix
1, a new Form M23A; and rules 10 and 21 substitute references to
this new form (in place of Form M6) where appropriate. Rule 11
makes a further consequential change. Rules 23(b) and (c) make
changes to Form M20 and M23 in light of the introduction of Form
M23A.

The Community Legal Service (Funding) (Amendment) Order
2005, SI 2005/571

This Order amends the Community Legal Service (Funding) Order 2000.
Amendments are made to Arts 2 and 5 of that Order in consequence of
the establishment under s 26 of the Asylum and Immigration
(Treatment of Claimants, etc) Act 2004 of the Asylum and
Immigration Tribunal, which replaces immigration adjudicators and
the Immigration Appeal Tribunal. Article 5 is also amended so that
the maximum rates of remuneration under contracts specified in that
article do not apply in relation to Legal Representation before the
Asylum and Immigration Tribunal or the High Court in applications
under s 103A of the Nationality, Immigration and Asylum Act 2002,
or before the Asylum and Immigration Tribunal in proceedings for
the reconsideration of an appeal pursuant to an order under s
103A.

These Regulations, which came into force on 4 April 2005, further
amend the Income Support (General) Regulations 1987 (SI 1987/1967),
the Housing Benefit (General) Regulations 1987 (SI 1897/1971), the
Council Tax Benefit (General) Regulations 1992 (SI 1992/1814) and
the Jobseeker’s Allowance Regulations 1996 (SI 1996/207)
(‘the Income-related Benefits Regulations’). These
Regulations also further amend the State Pension Credit Regulations
2002 (SI 2002/1792) (‘the State Pension Credit
Regulations’).

Regulation 2(1) amends the interpretation provisions of the
Income-related Benefits Regulations and the State Pension Credit
Regulations in relation to the introduction of the Armed Forces and
Reserve Forces Compensation Scheme (‘the new scheme’)
established under s 1(2) of the Armed Forces (Pensions and
Compensation) Act 2004 (c 32).

Regulation 2(2) amends reg 15(5) of the State Pension Credit
Regulations 2002 adding certain payments made under the new scheme
to the descriptions of income which are prescribed for the purposes
of s 15(1)(j) of the State Pension Credit Act 2002 (c 16).

Regulation 2(4) makes similar amendment to the Housing Benefit
(General) Regulations 1987 and to the Council Tax Benefit (General)
Regulations 1992 as modified by the Housing Benefit and Council Tax
Benefit (State Pension Credit) Regulations 2003 (SI 2003/325) for
persons who have attained the qualifying age for state pension
credit.

Regulation 2(5) and (6) amends the Income Support (General)
Regulations 1987 and the Jobseeker’s Allowance Regulations
1996 to include within the notional income and notional capital
rules, payments made under the new scheme.

Regulation 2(7) and (8) provides a £10 weekly income disregard
for guaranteed income payments made under the new scheme.

This Order brings into force the provisions of the Domestic
Violence, Crime and Victims Act 2004 set out in art 2 on 21 March
2005 (including ss 5, 6, 7 and 8 —causing or allowing the
death of a child or vulnerable adult); and brings into force the
provisions of that Act set out in art 3 on 31 March 2005.

These Rules amend the Family Proceedings Courts (Children Act 1989)
Rules 1991 (‘the 1991 Rules’) to provide that functions
previously performed by an officer of the Children and Family Court
Advisory and Support Service (‘CAFCASS’) are to be
performed, in relation to children ordinarily resident in Wales, by
a Welsh family proceedings officer. The amendment follows the
transfer of functions from CAFCASS to the National Assembly for
Wales by s 35 of the Children Act 2004 for children ordinarily
resident in Wales. The Rules take effect on 1 April 2005.

The Children and Family Court Advisory and Support Service
(Reviewed Case Referral) (Amendment) Regulations 2005, SI
2005/605

These Regulations, which came into force on 1 April 2005, amend the
Children and Family Court Advisory and Support Service (Reviewed
Case Referral) Regulations 2004 consequential on the National
Assembly for Wales and Welsh family proceedings officers having
functions in Wales previously discharged by the Children and Family
Court Advisory and Support Service (‘CAFCASS’) and
CAFCASS officers. References in the existing regulations to CAFCASS
and officers of the Service are amended to cover the National
Assembly for Wales so far as it is exercising its functions under s
35 of the Children Act 2004 and Welsh family proceedings
officers.